Journal of Accounting Research Vol. 39 No. 3 2001
Auditing in the Presence of Outside Sources of Information
Abstract
We examine how an auditor’s ability to terminate a multi‐period client relationship provides the auditor with a real option whose value depends on the nature of informational asymmetry between the incumbent and other potential auditors. In particular, we isolate conditions under which the auditor’s private and public sources of information behave as complements rather than substitutes. In such circumstances, increasing the likelihood of publicly provided information induces the auditor to expend more (rather than less)resources in private information gathering activities.
- DOI
- 10.1111/1475-679x.00021
- Volume
- 39
- Issue
- 3
- Pages
- 435-447
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref